Biglaw, In-House Counsel, Litigators, Securities Law, Wall Street

Inside Straight: A Requiem To Epiphanies

In the first lawsuit (during the proxy fight), the judge held that certain statements made in proxy materials were false and misleading. That lawsuit settled. In the next lawsuit (the 10b-5 class action), plaintiffs explain that precisely the same statements appeared in an annual report, and it is now settled law that those words are false and misleading. How do you avoid the devastating effect of collateral estoppel in the second case?

I solved that puzzle back in 1990. Now I’ve moved in-house, and I fear that I’ll never solve a similar puzzle again.

Have I lost my creativity? I don’t think so. Does my job still require creativity? Yes — but different kinds of creativity. This column is a requiem to a type of thinking that an in-house job — or, at a minimum, my in-house job — doesn’t seem to permit….

A very few times in your life, you may have a legal epiphany: You’re doing battle with a legal issue. It’s insoluble; your client is toast. The issue is tormenting you as you take a shower or drive to work. The issue has infected your dreams. The client is dead, and you can’t help.

And then it comes to you! It’s not just an answer, but the right answer! Your position is not simply plausible, but indisputably correct! Before you were in the darkness, and now it’s light! How could you ever have been so blind?

Those are great moments. I wish I could say I’ve had them often, but that wouldn’t be true. I’ve had those moments maybe a half dozen times over the course of 25 years of practicing law. I wish I could say those moments bathed me in glory. I can’t say that, either. I shared one of those moments (back when I was an associate) with just one partner at my small firm in San Francisco. Only the partner and I had wrestled with the issue, and only he and I saw the darkness turn to light. I shared two of those moments with very small groups of lawyers at my huge firm in Cleveland. The clients were toast; we told the clients they were toast; and then I saw the light. The clients had never really wrestled with the issues, so the clients didn’t truly appreciate the epiphanies. The only ones to savor your epiphanies are you and the one or two other people who had wandered with you in the darkness.

I fear those days are gone.


First, because in-house life is different from life at a law firm. In-house lawyers are typically dealing with a higher volume of cases and have less time to wrestle with one particular case or issue. In that environment, you’re less likely to have a flash of legal inspiration. (That’s not to say that in-house lawyers can’t add value to cases, of course. You can suggest arguments that outside counsel may have overlooked or propose editorial revisions to improve the persuasive force of a brief. But an honest-to-God epiphany — solving a legal issue that has confounded you and others for days or weeks — is hard to come by in a faster-paced, more-distant-from-the-facts-and-law environment.)

Second, you’re unlikely to have epiphanies because you don’t know in advance where an epiphany is lurking. If you knew with certainty that your outside law firm had analyzed a legal question and overlooked a critical issue, and that you personally would spy the solution if only you devoted a week to fretting about the matter, then you’d spend your in-house life pursuing epiphanies. But those epiphanies occur only once in a blue moon; as an in-house lawyer, you could waste decades pursuing epiphanies and never have one. Most of the time, when competent outside counsel analyze an issue, they notice what’s there; your personal concentrated effort wouldn’t add value.

Third, at least in my job, epiphanies are hard to come by because many of our cases are fact-bound, and the kinds of epiphanies I’m talking about involve legal issues. Lawyers frequently unearth new facts as the lawyers work with witnesses, but that’s the result of spadework, not inspiration. To have a legal epiphany, you must be obsessed with a tough legal question for some period of time, and then see the light. “Working up the facts” is not the same thing as legal inspiration, and fact-bound cases aren’t fertile fields for legal epiphanies.

Please don’t get me wrong here: Working as an in-house lawyer requires creativity, and it requires the same diligence and dedication involved in a law firm job. But the role of “managing many cases as they move to resolution” is quite different from the role of “fretting for days, consciously and subconsciously, about this one darned issue that spells death to your client and robs you personally of any chance of victory.” Until you’re facing the hangman’s noose in that very personal and extended way, you’re unlikely to have a legal epiphany. (Why do you think I’m not an academic? Put me in a tweed jacket smoking a pipe in the library, and I’d never again have a decent thought in my life. Angst, not necessity, is the true mother of invention.)

Legal epiphanies. I’ve had them all too rarely in my life, and I fear that I’ll never have one again. Requiescat in pace.

Oh, yeah: After I solved the proxy fight puzzle, I published the answer in a law review. I enlisted as co-authors the partner who was supervising the 10b-5 case (back when I was an associate), and a more junior associate who did a nice job gussying up the thesis into law review format. If you’re really interested in the answer, see John M. Newman, Jr., Mark Herrmann, and Geoffrey J. Ritts, “Basic Truths: The Implications of the Fraud-on-the-Market Theory for Evaluating the ‘Misleading’ and ‘Materiality’ Elements of Securities Fraud Claims,” 20 J. Corp. L. 571 (1995). Enjoy!

Mark Herrmann is the Vice President and Chief Counsel – Litigation at Aon, the world’s leading provider of risk management services, insurance and reinsurance brokerage, and human capital and management consulting. He is the author of The Curmudgeon’s Guide to Practicing Law (affiliate link). You can reach him by email at

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